Double-cab pickups to be classified as cars

Within The Government’s Autumn Budget were changes to the tax treatment for Double-Cab Pickups (DCPUs) with a payload of over one tonne (1,000 kilos).

From April 2025, they are to be classified as cars for both capital allowance and Benefit in Kind [BIK] purposes which will trigger notable changes to the tax treatment for both business and employees who use these vehicles.

Common examples hit with these changes are the Ford Ranger, Isuzu D-Max and Volkswagen Amarok.

Let’s have a look at what this will mean…

For businesses

This shift means that these vehicles will no longer benefit from the tax treatment traditionally given to light commercial vehicles such as the Annual Investment Allowance (AIA) which deducts 100% of the value of the vehicle from the company’s taxable profits in the period it was purchased.

Businesses can only claim these capital allowances on double-cab pickups if they are purchased before April 2025. This means that any double-cab pickup acquired from April 2025 onward will follow the passenger car capital allowance model. This will mean relief at a rate of 18% or 6% depending on the CO2 emissions of the vehicle.

However, employers who have purchased, leased, or ordered a vehicle before 6th April 2025 will be eligible to use the previous system until their lease ends, discarding the vehicle or up until 5th April 2029.

It is important to note that there is no change to the VAT treatment of double-cab pickups. Vehicles with a payload of one tonne or more will continue to be classified as goods vehicles for VAT purposes, allowing VAT to be reclaimed under the usual rules.

For employees or directors

Currently, double-cab pickups do not give rise to a taxable benefit where private use is insignificant. However, under the new classification as a car, a taxable benefit will arise if the vehicle is available for any level of private use, regardless of how minimal it may be.

Key dates for these changes:

• 1st April 2025 – For Corporation Tax, double-cab pickups will be treated as passenger cars.
• 6th April 2025 – For Income Tax, double-cab pickups will follow the same classification for BIK and profit deductions.

For those considering the acquisition of a new double-cab pickup, completing the purchase before April 2025 will allow businesses to retain the current, more favourable tax treatment.

*Please note that all references to double-cab pickups in this blog post refers only to vehicles with a payload of one tonne (1,000 kilos) or more.

If you have any questions, give us a call on 01872 267 267, or email us at contact@whyfield.co.uk.